Transcripts For CNBC Squawk Box 20130926

Defund the health care bill. Among our newsmakers on the topic this morning, we have former oh bam in omb director peter or zaszag. Then coming up at 8 30 eastern, we have former vice chair alice rivlin. And aei senior fellow Kevin Hassette. And in other washington news, the federal Housing Administration will likely soon take a cash infusion from the treasury. The agency needs help to cover losses from souring loans. Jcpenney looking to raise as much as 750,000 to 1 billion to build up its cash reserves. The retailer is leaning towards issuing new shares. But other methods of raising capital are erroredly on the table. Goldman sachs says it expects the retailers to move more slowly. Anyway, another hard hit stock this year, blackberry, we talked bit almost every morning. Fairfax financial says it is confident it can find the money to fund its 4. 7 billion for the smartphonemaker. But shares did fall yesterday on doubts about that bid. Meantime, tmobile, i dont know, becky, announcing it will stop stocking blackberry in its stores saying it is no longer efficient to keep the devices there, meaning nobody is buying them. In other corporate news, citigroup has agreed to pay 395 million to freddie mac. Potential flaws. Roughly 3. 7 million mortgages that the bank sold to the Housing Finance company from 2000 on to 2012. Back over to you, becky. I dont know what im going to do, andrew. Im holding on to my last blackberry. Its a hard to come by option these days. It will be a collectors item. Yeah, i think it will. Do you guys know what a you know what a time capsule is. Yeah. Theres not many around. If they have a time capsule, people will go back 20 years from now and look what people are using. And can you believe we use these things . Yours is in Good Condition and one of the last ones that i see around. I have a second one upstairs from my last one. Save them to the kids for the time capsule there. Bed, bath beyond posting slightly betterthanexpected earnings revenue. A little bit of a different story for j dell circuit. Current quarters earnings disappointed guidance. Cesars entertainment making news. The casino and Hotel Operator announced a 10 million share secondary offering through credit swiss. Take a look at what happened in that stock, too. Joe, back over to you. Ive been sitting here pondering the way it feels. Maybe its a good thing. I look at the dow and its just what is going to be the impetus to get the averages moving higher again . Thats what worries me. Its like the law of diminishing returns on qe. And, you know, we got that oneday bounce. Goldman sachss entry . Visa. But just in general, where is the positive sentiment . Maybe we dont need positive sentiment. Strong consumer sales over the holidays. Now were worried about earnings. Were worried the reason you see, thats the other thing. The reason that the fed didnt taper was because of the economic back drop was positive. Bad news is bad news. Remember, may, we were at a high and they said they were going to taper and then the market went into a tizzy. Then we finally got back to another new high when they said they wouldnt taper. Now, its just i dont know what have you done for me lately . 85 billion to 95 billion. Yeah. But im worried that were stuck. Im worried that, you know, what if theres no it has to be strong earnings. And then youve got yellen who might not want you to start tapering because she may be headed higher. I dont know. And then youve got all this stuff. I was going bring in go dog go or some we should have done that yesterday. If we were going to read dr. Seuss, we should have done it yesterday. We missed our window. And anyway, lately, what the dow has indicated n morning has not been where weve closed. Its had Trouble Holding on to gains ever since ta big gain we had on nontaper day. Lets look at the oil markets now. Any chance we had to go below 100 after syria looked a little more positive once the dollar started going down, that got to be less likely. The tenyear, i have no idea if my life depended on whether the above three or below 2, i dont know. In a month, you moon . No. The next move. Is the next move above three or is it down to two . I think its above three. Do you . I do. I hope so. I do. You wouldnt normally hope for signs to go up. And you start to see how people are worrying again. We dont want to fall into this swoon. Is the dollar board or the gold board wa do we have . I was thinking 135 on the euro. That is near term highs. Now all of these markets are waiting. Lets go to the global markets. Ross westgate is standing by in london. Is that red . I think i saw its almost like christmas behind him. No, its red. Its red, ross. Yeah, it is, joe. Im like the futures. Were down down side here in europe, about 6 to 3 decliners currently outpacing advancers. Its been like tloo that through most of the session. Fairly flat today for the uk markets, just off 10. Its gets worse as we go along the wall. The xetra dax off 0. 3 . The cac 40 down 0. 5 . The ftse mib is down 1. 8 . Last night, we have a vote from members of sylvia berlusconis party. They voted to say they would withdraw support from the Coalition Government if he was kicked out of the senate. Were trying to see if we can get some resolution for that story which is ongoing. And would have been talking about it for a various number of weeks. Some interesting stocks to look at today, nokia selling its hand set business to microsoft. Its been reported that they have been considering before and maybe post whether they should file with alcatel lucent, the other network equipmentmaker. Alcatel lucent listed in france up over 6 at the moment on the back of that story. And finally, as well, h m, the swedish retailer, well known around the globe, up 6. 5 today. Comfortably beating forecasts with sales and sales for september up around 8 on the year. That is where we stand. Back to you. Ross, thank you very much. Well talk to you again tomorrow. In the meantime, consumer stocks took a hit after learning walmart is cutting orders with suppliers as merchandise starts to pile up. But a spokesman said the report was misleading. He ordered in some categories the discounter is ordering more and in others the discounter is ordering less. How worried should investors be . Joining us now is sara malick, with tiaa creff. Thanks for being here. Thanks for having me. When you hear walmart is cutting back on orders because inventories are piling up, that is an allout alert heading into the holiday season. How worried should we be . We actually still think the consumer is very strong. One stock we still like is costco because this is more of a recurring revenue business. This is the type of may be name you can continue to own. Costco, customers love it. Where else can you go and buy a new york strip state steak and an Engagement Ring in the same shopping cart . This is true. And you can go there for lunch. And 70 of coast cos profits are on fees. Thats an argument for costco. When you hear what happened with walmart yesterday, does that worry you about whats happening on the lower enof the shopping consumers . Theres always risk around trading up or trading down with the consumer. We think the economy remains really strong and that the strong consumer and manufacturing data will support the economy from here through some of these equity debt ceiling and negotiations. What is the fed doing . The fed is waiting for their Economic Data to hit their targets in terms of employment and economic growth. They also probably wanted to take a pause as we get through some of the october budget negotiations. So when that data hits their targets, we think tapering will start. Likely at the end of this year or in early 2014. I wonder if the summers thing the more i think the summers thing i think it was part of the i dont know. That is just the gossipy take on it. If its going to be janet yellen, would is more comfortable with qe than summers was, i think they felt less need to start before he left if shes going to continue and pain be more dovish than he is. So you think the second larry gets out, then they make that t decision not the same day. Its like, wait a minute, do we want to go down ten so that her first move is going back up ten . Didnt they talk about her in the room, by the way . Do they say, look, janet, we know it looks like youre going to get the job no, not in the room. Sfwh did you renew your costco card . I have been to costco, but i dont have a card. Youve been to one . I dont shop. I have a costco card. Ive also been to walmart. What about beyond costco, which is a unique situation where you have the membership cards and the needs coming in from that . Do you like any other retailers . We like car max which we think will be a game changer in the used car industry. Car max knot your fathers oldsmobile any more. This company has a great market share opportunity. They have 2 market share. We expect that to triple over the next five to ten years. This is another retailer that deserves a premium because of their strong growth rate. When we look at the average age of the fleet of the nations cars, i think its Something Like 11 years now and car max has been a big beneficiary of people keeping their cars around longer, do you expect that number to go down at any point as people buy new cars . And will that impact car max . We think that car maxs growth will come from a lot of new store openings and theyre using their strong free to can a cash to grow that. We saw strong auto sales in august. We think all of that will benefit car max. Like auto nation or we prefer carmax. But you might still like auto nation, right . We would prefer carmax. All right. Never mind. Thank you very much for joining us today. Great talking to you. Thanks for having me. Coming up, twitter striking a deal with the nfl. This is amazing. You said you didnt like twitter. Now youre going to have to love twitter. Well talk about that. Snippets, though. First, as we head to break, lets check on the national forecast. What determines when we get the ateam, like reynolds . I love alex, but i mean, when this guy comes on, it just is i dont know. He lights up a room. Its the pocket square. He likes up a room. Checking the mail. Man, check it in the mail. Thank you so much, joe. Look at how quick we get that music ready. That is fantastic. Guys, lets talk about your forecast quickly. Rain and snow up in montana. Some spots could see up to 10 inches of snowfall before the day is out. Beautiful conditions for you even into the weekend for much of new york. Breezy conditions back into connecticut and into rhode island. So in terms of delays today, could see showers and backups potentially in miami. But hey, looks fantastic for you both in new york and chicago. No major issues. All right, folks, sit tight. We have more squawk box coming up. Well see you in a few moments. vo you are a business pro. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Ask ask. Time now for the executive edge. This is a daily segment focused on giving Business Leaders a leg up. Twitter will soon carry instant replay nfl footage. Its part of a new advertising partner that could boost the companys revenue. Twitters amplified Service Allows broadcasters to show video clips and ads that are tweets through what is being sloan on tv. As part of the package, the nfl will add other game highlights. This videos will include a short ad from the marketer and the tweets will be distributed by the marketer during the games. The nfl and twitter will both testify the proceeds. Andrew, you had the early call on this on thinking that more of these Internet Companies were going to get involved with the nfl and once it goes to sports, then people who dont love it, youre going to get forced on to it. I had the opposite take. And that was when goodell was in here, i said, please, do not people said it was like tommy boy where he loves that movie. Its a beautiful thing, nfl. Dont ruin it by letting google or amazon televise whole games. But this is different. This makes sense. Broadcasters actually agree with it. Youre getting additional revenue. Lets say theres a great play and you tweet it out that, wow, i missed this. And then you watch a snippet on twitter. Thats totally different than letting a google televise every nfl i dont think youre going to get google televising every nfl game. Its a steady margin. Thats 10, 20 years from now. Its designed for networks you see like nbc. Like nbc, i know. Something like this is for live graphics, right . If you missed it, maybe you would go and run to a television. This is like an add on that enhances the experience. They call it the second screen. That screen experience. What is that thing that weve had . What is that, sport where they guys that are talking about the t sports games or sports production. Theyre tweeting, hey, did you see it . He reminded me of that a little bit. Except i dont want as a person, i dont want my thing there when im trying to watch i dont want to have to hear it go off and say whats this when the game i do it already. When im watching something that comes on or you get twitter on your blackberry . I do, yeah. I have an app for it on the blackberry. Look at you. Im not as Old Fashioned as you think. But its not as good. No, its not, and its frustrating because it doesnt connect to links like this. I was thinking about this when i read this story. I dont think i would be able to watch any of these clips on the blackberry. I heard that nokia is getting out of the hand set how is that . Nokia out of the hand set business. It was sold to microsoft. Noi nokia, motorola, Ericsson Ericsson got out of it a while ago. I know. But think about it, when you watched those movies and the guys that make televisions, too, none of those exist any more. Theyve all been the spun off and bought by companies overseas. The samsung in your house years ago was a cheap tv that you had bought and now its state of the art. The world has changed. Guys, lets talk about something being called one of the greatest comebacks ever in the world of sports. Oracle team usa capturing the americas cup against new zealand. Just a week ago, larry elisons team trailed 81. It was being compared to, i dont know, the red sox coming back after a three losses to the yankees and being able to actually win the seventh series. Or the ryder cup when europe came back. Right, right. I wish i understood it better so that i could be excited that were keeping the cup. But they said that i guess theres a zigzag part and supposedly this boat was so fast they just caught them. But its hard work because they told these guys, this is it, this is the time to do it. And i guess the well, really, one of the guys died on may 9th. As a result, they were wearing kind of body armor, the rest of the sailors were wearing body armor, had a knife on them and a locator device in case you fell over. That thing was flying. Business question, though. Its called the oracle team. Did oracle pay to sponsor that . Larry elison paid about 500 million. Is it larrys money or oracle . I think the bulk of it, i think larry elison himself paid about 500 million. I dont know if oracle pays anything into it. If its called oracle, i thought the elison team the dynamics of this and yesterday talking about he was an absentee ceo because he was working on this. And i was thinking if its the oracle team, maybe it benefits oracle because of the branding. Do you remember the whole ted turns mystique. Captain courageous. There was another rich guy delving into sailing. Even jane fonda thought he was irresistible at that point. Actually, i think he was irresistible. Less irresistible now that he has less money . Is that wa dwrur thats mean. So he does have a little time warner. Shares, yeah. When we come back, a new fund will let investors bet on bit coins. We have the man behind the venture joining us right after this. First, as we head to break, take a look at yesterdays winners and losers. [ male announcer ] this store knows how to handle a saturday crowd. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. Good morning and welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and Andrew Ross Sorkin. Im being told that its ted turners boat was called the courageous, but the moniker was captain outrageous at the time. Making headlines this morning, richmond fed president Jeffrey Lacker says the Central Banks effort to assure the public that Interest Rates will remain near zero for years could have a per verse effect. He says it could hurt confidence and damage economic growth. Lacker has been critical not only of the zero Interest Rate policy, but also qe and the asset purchases. This is kind of a new twist on things, though. Everybody has an opinion about qe being good or bad. But most people think the zero Interest Rate part theyre not criticizing that. They should emphasize that as we exit qe, right . By emphasizing well stay at zero to not get the market to worry about that. Now lacker is even say that might be i dont want them talking any more. What good is it . One economic figure makes all the comments moot. Plaquerock will focus on short maturity funds. Blackrock and other etf providers note concerns about Interest Rates going up has driven investors towards shortterm fixed income securities. See whether thats the right move or not. We dont know. Maybe Interest Rates arent going up. We talked about that early earlier. Ive got todays squawk box planner for you. Coming up at 8 30 eastern time this morning, we have weekly jobless claims. First time filings are expected to rise to 330,000. Remember, there have been issues over the last two weekly reports. Those numbers were skewed by upgrades on two Computer Systems that caused the states to underreport claims. So well see today if we finally get a clean number on that. Also coming up at 8 30 eastern, we have a final read of the Second Quarter gdp. The number is expected to show the American Economy was stronger than first estimated. Gdp is seen increasing by 3. 8 . And then after the bell, we have nike posting quarterly results. This is the companys first Quarterly Report since joining the dow. So still obviously well be watching it pretty closely. Lets check on the markets again this morning. We had another down day yesterday, but were still you know, we ran up so much before the fed decision that were still you know, were near the highs. Lets look at that today. But it doesnt feel like were near the highs. Were indicated up 26 points, but as we said earlier, the Early Morning futures fair value hasnt been indicative of where the market has closed lately. It kind of just is like a sickening slide into the close and october is coming. Its one of the cool months. The coolest. When is it . Thats on tuesday. How many times in september . 30. Monday is the 30th. Tuesday begins cool season begins. Yeah. Come to you for these. Like a calendar. Youre good. You are good. Lets look at europe. Even though, you know, they should key off us, thats from yesterday, really. Europe is down across the board. A quick look at asia and then well look at the oil. Asia is mixed. The nikkei looks pretty good. The oil still above 1 is 00. Well see whether that changes as we rachet either up or down or economic expectations. The tenyear is really been well behaved for people that were worried about it going up too quickly. Now some consternation, if it goes down. As far as the dollar goes, the dollar has been weak since the decision last week. Especially versus the yen and the euro. Its kind of in between its last threemonth range right in the middle. Maybe we should do the show from a yacht one day. What . I dont know. We were just talking about boats. Captain outrageous. Sleep in. Well come to your place. Were doing the show from nantucket this morning. I was looking to see if i owned a whale belt this morning. A what . A whale in nantucket, they ware whale belts and nantucket red pants. Belts that actually have a whale . A whale. But, andrew, we hardly knew you. He was on a list of speakers at this conference that included gorbachev, larry summers. I mean, huge and pope francis, i think. And then Andrew Ross Sorkin and i looked at it. Im going to a conference in nantucket tomorrow. But youre not just covering it. You are one of the visionary thought leaders that people are going to be hanging on every word. I dont know about that part, but well be on the air tomorrow from nantucket. With bob dimon. Apparently gorbachev is not coming any more because he is having spinal surgery. He didnt want to be upped by Andrew Ross Sorkin. Hes having what . Apparently hes having spinal surgery. Were going to be upstaged now by a friend of the show. Lets talk about betting big on bit coins. I dont know what to make of bit coins. The online marketplace buys and sells liquid assets is launching its newly minted investment fund. Joining us on the set is the founder and ceo. We havent seen you in a while. Its been a few months. Yeah. Facebook is over. Groupon is over. All of everybody else that had their ipos. And now youre entering the bitcoin market. What is this . Where are you on the bitcoin . Are you a skeptic, a believer . Im a skeptic. I dont understand. Because i said to you, when he walked on the set, i said can you give me a bitcoin . I said, i dont have one. I can send you one through my phone. I have full faith in the u. S. Government. It will eventually be repaid. Who do i turn to for the bitcoin . Can you hold it . There are physical representations, but there are . Yeah. Is your picture on the coin . No, not yet. The bitcoin is a Digital Currency and its a fantastic Global Network for basically sending value around the world. And think about money and its a digital format right now. And its really revolutionizing the way ta money could work. And so the potential upside for bit coins, its enormous. It could get a share of kind of the gold store value market. It could take on the western unions of the world who take very large fees. What is preventing somebody else from creating a similar currency . Why cant becky and joe and i just start the squawk coin . You absolutely can. Theres 1. 5 billion out there in bit coins. You have investors getting involved in this. Bill gates has come out and said this is a technical force. So it has such a head start. I think its hard for another currency to take over. Ive ryed to understand the whole thing, but who is responsible for creating bit coins . Who is the fed essentially or the treasury . This is unique about this. Its not created or controlled bay government or a company. Its open source and within the code, abdomen i find that number of bit coins that will be created over the next hundreds of years. So theres certainty into how much bit coins will be created. So you dont run the risk of basically debasing a currency and losing your purchasing support. So its been can we successful in identifying up and coming classes. Bitcoin we think is the next big thing. We think its incredibly risky. We think its akin to the early start of a risk profile. So we enable investors, both constitutional and sophisticated investors to invisit in bitcoin without having to wiring money overseas to these exchanges which may or may not be around if a few weeks. And then this very will trade on market in years. And how does what youre doing differ from what the twins we just mentioned the twins. They launched an etf. Theyre talking about launching etfs. Three important distinctions. Number one, ours is only open to sophisticated investors. I dont believe this is ready for prime time retail investors. The outcome is binary. Youre going to either lose all your money or have a fantastic return. The s. E. C. Defines that unfortunately as network or income. I wish it wasnt that way. But that is how they define it pb number two, its going to trade on Second Markets versus being publicly traded. More importantly, a new etf can take years to go through the process. So they just filed with the s. E. C. Who knows if and when this will ever find its way into the public market. Were launching today, were taking your money today. When people talk about gold etfs and other etfs, they cite one of the problems as being that the etf doesnt necessarily hold all those. We can public the exact wallet so you can see the bitcoin exists every single second of the day. So its bitcoin is the plural, not bitcoins . Its a different interpretation. The price of bitcoin has fluctuated a lot over the past year. What drives it given that its not like theres a lot of new bitcoins coming on to the market. Theres adoption rates in various countries thats really start to go increase. China. Its becoming pretty popular. In countries like argentina where you start seeing massive inflation, its a lot easier to get bitcoin in argentina than it is u. S. Dollars. That makes sense to me, somebody who is worried about an inflationary environment and their money being worth less. In history, the average life of a currency is 27 years. We have a very u. S. Sent rick view. The is not going replace the u. S. Dollar, its not going to replace the euro. And youre not worried that the bit coins can ultimately be regulated out of existence in the United States . Theres a lot of talk about bit coins being used for drug transactions or elicited activities. The idea that they cant be tracked, it cant be traced, but theres lots of issues around this so that ultimately the government says, you know what . You cant play this game. The narrative has changed over the past six months. In particular, the Treasury Department in march came out with guidance saying it is legal to own the coin, it is legal to use the coin, but if youre in the business of changing bitcoin for dollars, you have to releg lated. So all of the discussion that were seeing and hearing right now, its not that this is a bad thing that has to be shut down. Its here, this is something that can be really, really good. This is an incredibly innovative concept so lets support it. Switch gears real quick for us. Twitter, the ipo, you still have these things on your private market . The way a Second Market works now is Companies Open up a window once a year, twice a year. Twitter has not opened up Second Market within the past month. Zero visibility. Do you have any idea what the value of twitter should be . No more than you. Do you think there was any less from the facebook ipo . Any any lesson. Oh. Do you look at the facebook ipo as a success or a failure . A success. Where the price is now, i attribute a lot of the price sprrchls to the nasdaq opening day. I think it lost all the momentum, it sucked all the air out of the room. You look at the price on secondary markets and where it is today, this drop that existed the new cycle, that was report ily right after they were telling some people about body language, they were downplaying the revenue growth. Remember, it was automobiles. And now all of sawed, it was on the upswing for social in general and here they are. They executed incredibly well on mobile. The challenge for you, now that facebook is out of the game, zingah is out of the gate and twitter is about to be out of the gate is finding new assetes and other private companies to actually participate . Is that your challenge . Because there was a time where i assume more than 50 of 80 of your business was basically facebook. All of those stocks, thats what was driving the business. The best part of this happened over the past two years is that it is not only accepted, but expected that companies will stay private as long as possible and they will allow their employees and investors to sell some stocks before going public. The Second Market, the vast majority of every single venture based company that you guys talk about, that has done one of these transactions, they have dont on Second Markets. That is the way these companies are growing up now, staying private and providing liquidity. Thank you. Good luck with that. That sounds exciting. When we come back, a group of lawmakers are trying to end the bulk of nsa records correction. That story is next. Americans take care of business. They always have. They always will. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. With my united mileageplus explorer card. Ive saved 75 in checked bag fees. [ delavane ] priority boarding is really important to us. You can just get on the plane and relax. [ julian ] having a card that doesnt charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u. S. When i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the american people. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. Welcome back, everybody. Take a look at the u. S. Equity futures. They indicated slightly higher this morning. Dow futures up by about 28 points above fair value. S p futures up by about 1. 7 above fair value. This is coming after five days of market declines. Thats the longest losing streak for the s p 500 that weve seen all year. So well see if these gains hold on as we get closer to the opening bell. In our headlines this morning, a group of democratic and republican senators introduced legislation to engz the nsas bulk collection of americans up communication reports. This bill would put other new restrictions on the governments evenings dropping program. The Senate Intelligence committee will hold a public hearing today. The senator joou Judiciary Committee is addressing this issue and other members of the house have introduced legislation. Something about that name. About Senate Intelligence Committee Just you think its a i dont know, doesnt it an oxymoron . Its kind of an ox yn employer. I mean on both sides. Im not saying anything about cruz or harry reid specifically. Senate intelligence committee, you have to think about that term. Its a great time for sports fans. It is october where its a little bit cold at most of the games. The reds are easing into the playoffs, losing to the mets. 10. Theyre going to get a wild card spots. Theyre four games behind st. Louis now. The nfl is in full swing and the nba will soon be hitting the court. But when it comes to winning, winning, theres no say that for me. Winning. Winning. Youve got 10 million winning. He is loony. He is just insane. We should have him on as a guest. Guest host. But he has to sit through the 10 million followers. But its no off season for franchises. Many teams return to go big data using the money ball play book. Could teams be wasting money trying to make data an allstar . Eric zimbolos is coauthor of the upcoming book, saber metric revolution. Its good to see you, profess perpendicular thanks for joining us. Pleasure to be with you. Can i come with you to nantucket tomorrow . Thats andrew. I dont know, andrew. Do you have a whale belt . Look, ill get whatever i need. Theres a store that has one. So we all think it works, dont we, because of the brad pitt and who was was in that, that if you really delve hard into the data that you could predict the outcome for a season. Do you think that is possible . Delving hard into the data is used in a variety of ways. If youre talking about using it to assess talent, it can be successful in baseball. We talk about the impact of using data more frequently and more successfully on Team Performance and it does seem to have an effect. One of the issues for baseball, though, is that a lot of low hanging fruit has been picked. The simple concepts like onbase percentage that says walks is as important as well as hits. Those were easy. And the front office has only had to pay 30,000 to hire somebody to tell them that. These days, theyre doing much, much more so fest indicated, complicated stuff. The marginal impact of it is going to be a lot smaller and the people theyre hiring costs a lot more. So it has been successful going forward. Its i think a question. And its much more difficult to do in sports other than baseball. I was going to ask you that. It seems like i guess it would be. Any other anything else that like youve got the onbase percentage for baseball. What would it be for football, or there isnt anything . Let me take you back a step. With football and soccer, hockey, the nature of the game is much more interactive, much more active. Its easy to isolate the production of an individual baseball player. A pitcher is on the mound. Theres a confrontation between two people. But a quarterback in football is not confronting one person. Theyre confronting a defense of 11 people and theyve got ten people who are either protecting them or going out on routes to get free. So whether a quarterback completes a pass or not is dependent on all these other people. Its much more difficult to violate wh isolate what a quarterback is doing. They have a passer rateding, but its very inaccurate and it says nothing about the quarterbacks ability to break free on charging linemen. It says nothing about the quarterbacks ability to run the ball, all of which is very important. So i dont think that there is a simple metric in football or basketball that steps forward and says, Pay Attention to me. I think height in basketball is good. Height is very good. Other things being equal. Maybe its good. Maybe its good that we cant really distill it down to completely simple numbers. You take out heart and, you know, you know, all the serendipitous events that happen in sports, as well. I dont think that any of the smart people in sports today think that analytics or big data replaces the Human Element and the subjective element. The successful teams doing it are ae placing all methods. Why cant i putt . Is there something can you use this for golf . What causes the never mind. I think you should be talking to a shrink about that, not in everybody says that. Everybody says that. Its about and age. The nerves get older. Andrew, thank you. Amazing. The payroll was so low i heard bobby kodik was in that movie too. He was. And the other thing you want to do is not only identify onbase percentage, but you have to identify something with a market in efficiency where everybody else is undervaluing it. I see what you mean, yeah. So you have to see the situation that its not implicit already in the numbers and then act on it. Thank you. Everybody thought getting on first base mattered. Nobody. Joey has more walks than anyone in the national league. The first baseman with the reds, cincinnati. How much does he get paid . A lot. Hes in your league. League so to speak. Nice. Good for him. Still to come on squawk box, a showdown on spending, the debt ceiling and obama care. Among our news makers on the topic, former obama omb director peter orszag is going to join us for the hour starting at 7 00 eastern time ten minutes from now. [ tires screech ] [ male announcer ] 1. 21 gigawatts. Today, thats easy. Ge is revolutionizing power. Supercharging turbines with advanced hardware and innovative software. Using data predictively to help power entire cities. So the turbines of today. Will power us all. Into the future. How old is the oldest person youve known . We gave people a sticker and had them show us. We learned a lot of us have known someone whos lived well into their 90s. And thats a great thing. But even though were living longer, one thing that hasnt changed much is the official retirement age. The question is how do you make sure you have the money you need to enjoy all of these years. Always go the extra mile. Ears. To treat my low testosterone, i did my research. My doctor and i went with axiron, the only underarm low t treatment. 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[ all ] fort benning, georgia in 1999. [ male announcer ] usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection and because usaas commitment to serve military members, veterans, and their families is without equal. Begin your legacy, get an Auto Insurance quote. Usaa. We know what it means to serve. [ engine revs, tires squeal ] [ male announcer ] since we began, mercedesbenz has pioneered many breakthroughs. Breakthroughs in design. Breakthroughs in safety. In engineering. And technology. And now our latest creation breaks one more barrier. Introducing the cla. Starting at 29,900. Just really quick, i couldnt believe so michael j. Fox, 9 00 p. M. Tonight, michael j. Fox show on nbc. Did you see who his wife is in the tv show . No, who . You dont know this . I dont know this. You dont know this. Help me. Hank schraders wife, becky brant from breaking bad is his wife. Thats cool. I thought i recognized but you know who michael j. Foxs wife is, who is the sweetest. Ive been here so long, steve pollen, her dad used to be on cnbc as a certified financial planner. And didnt he meet her on family ties . Yeah. And theyve been married 25 years and they have a beautiful family. Same thing happened with who were the two on growing pains. Did you see michael j. Foxs son . Hes so cute. Its alex. Hes really cute. Anyway, 9 00 tonight. We werent asked to do that. It was not part of the i was telling you, i watched the voice the other night, they got cee lo and Christina Aguilera back. Im drawn in. You are. Good. All right. That really worked well. It did. We got michael j. Fox anyway, coming up, former obama omb director peter orszag. Squawk box will be right back. The bulls got bruised. S p recording its longest decline since december. Guest host, peter orszag joins us to discuss the markets latest moves, the fed and what he sees driving an economic expansion, which were hoping for. Its a squawk ceo call. Athena health ceo Jonathan Busch talks health care in the cloud, how the president s reform is affecting his company and what he expects from clients when the Health Care Exchange goes online. Were going to talk whats working with kevin land as the second hour of squawk box begins right now. Good morning and welcome to squawk box here on cnbc, im Andrew Ross Sorkin along with joe kernan and becky quick. We do have green arrows. S p 500 about 2 1 2 points higher and the nasdaq up a little, closer to 11 points. We are keeping an eye on the escalating budget battle in washington. Lawmakers working on bills to raise the nations debt limit and to pass a stopgap spending bill that would avert a Government Shutdown. Well see if that will happen. A gop effort remains at the center of the dispute. And yesterday, treasury said it would run out of money by october 17th with no increase in the debt limit. Also jc penney reportedly now leaning towards raising 1 billion by selling new stock. It wants to build up its cash reserves ahead of a holiday season. According to reiters, the company is still considering other options, as well. And were also watching beckys favorite company, blackberry today, the chief executive of financial, i think fairfax financial says he has every intention of completing his companys 4. 7 billion bid of blackberry. He says hes confident hes going to be able to finance such a deal, though. We should say separately. Tmobile usa saying its no longer going to carry blackberry phones in its stores saying theyre not in high demand but the phones will be available online. Blackberry said theyre going to get out of the consumer business entirely. So maybe this shouldnt be such a big surprise. We have a great guest host. Hes a guy that most people come in and if they have their jacket on, a lot of times they dont want to take it off. You were in there you were in there doing it with numbers. Youre used to working, right . Youre used to youre not just like these guys that talk in the administration. You had to do stuff. Hes also former omb director under president obama and i love you because youre look at that. He loves me. Because, now youre now you were in the obama administration, obviously. And youre in the private sector. So youve got both worlds. No private sector with no, im kidding. But at this point, you can talk about both. And i think looking back, you have some perspective, dont you . Good point. Frankly, i think this is one of the one of the kind of bigger problems that we face, which is we have gotten so nervous about people going in and out of government and there are legislate reasons for that that youre losing expertise on both sides. There arent enough people in business that know anything about government, there arent enough people in government. We should hope theres easy access. Look, you want to be careful about conflicts and what have you. But nonetheless. I actually think i would have done my job better if i had more private sector experience before i went into government. I now feel that. The president wouldve done his job better if he had but thats a totally different easy, easy. Im speaking about my personal im not extrapolating. All right. Did you i saw you brought some dr. Seuss to read to us today. Yes, green eggs and ham. Surreal. Thats just kind of a symptom of im ready for anything in washington right now. The core problem here is for the past several decades, the political system has been polarizing. And at this point, there is no middle in the congress. There really isnt. If you look at the voting patterns and that is the core problem and thats not going away. We keep kind of having these episodes thinking this is the last one. Were going to get through whatever were going to get through and then its going to be back next year. Theres no middle in congress. But you would argue theres no middle in the republican party. Its skewed at this point to, you know, tea party or towards the more radical. Would you concede thats kind of true on the other side, as well . Look what happened to larry summers. Look what was going to happen with syria. I mean, the democratic just to be fair, though, both parties have polarized the ideological shift has been more significant on the republican side. But, look, when theres no middle, theres no middle. The ideological on the far left was always there. Because theres a wall left of where they are right now. Theres no youd have to come around the other side in the time Space Continuum theyre so far left already. Okay. Sure. You grant me that. So, as a citizen, basically im screwed, i guess. I should just face that with where we are right now. It is very difficult to see how governance is going to work. The only time this is not going to be a problem is if one party or the other wins the trey if he can that of the white house, the house in the senate and it governs in a partisan way. A, it doesnt happen that frequently, and b, if you take that brief shining moment and do something, you generate so much backlash you lose the trifecta. I went and looked, the Washington Post had something out about previous Government Shutdowns and a bunch of shutdowns came when jimmy carter was the president and the democrats controlled the house and the senate. But they shut down government repeatedly even controlling all three branches. Theres nothing perfect. The point is, though, that kind of degree of conflict is clearly much higher do you have a view is there any kind of historical similarity where weve been in this situation, its been this bad and then it got better and how it got better . Yeah, its happened twice. Once was before the civil war and the second was around world war i and before the great depression. Those arent exactly inspiring historical episodes. The guys that tried to figure out great government, dividing it was one of their primary goals to do, which they did, and then weve also heard of the clinton years. Everyone pining for the clint years and we know full well that was one of the and congress was divided and it was everybody was watching checks and balances on the other and it worked pretty well. But at the time, we didnt think it was so great. I guess we didnt. Thats true. We do also have to remember it always seems like the past is golden and, you know, current problems are so severe. Nonetheless, if you look impeerically, the system was less polarized then than it was today. I always want to go back to a previous age. I dont know. So i dont know how near term, what does all this mean for how this plays out in your view . Is it possible we get a oneyear delay in the individual mandate . Is that what could potentially come out . Thats not going to happen. That is not going to happen. Is there some other olive branch is that the white house is willing to give on entitlements or reform . Heres the problem at this point, again, because this is going to keep repeating is if you show, if you give a little then the question is, okay, next time. Now youre being as stubborn as the right. This is the problem, thats what happens when youve got two intractable forces. We had a couple of people on yesterday from the fix the Debt Campaign and they were saying that maybe the way about doing this is going back to what the president had already offered in terms of talking about some of the things that he would be willing to give. I dont think that deals on the table. I agree. It may come back on the table. Its not thats not over the next month and a half or next month kind of thing. The thing were talking about in the 6 00 hour, is there a light at the end of the tunnel . Is there anything you think economically, is there anything thats going to happen in the next six months that is a force for good . Weve been talking about the markets broadly. What would happen that would help us to get through this . If we got through this. Lets step back here. We have made massive progress in terms of the big story here is the big constraint on growth for the past three to four years was private sector deleveraging. State and local fiscal consolidation, thats basically done. If we can get past this and not cause further harm, weve actually got, you know, decentlooking 2014. You have an interesting take, though. You think the best thing may be for us to actually have a Government Shutdown versus what could come later. Heres the problem, the House Republicans appear to be adamant about having a oneyear delay or some other, you know, obama care related thing that is not going to happen attached to either the debt limit and or the continuing resolution spending bill. If we are going to go over a ledge, i would rather go over the ledge with the spending bill than with the debt limit. Lets get it all out, be done with it before we get to the debt limit. Because a Government Shutdown is better than the alternative. Far better. Not even close. Theyre not even kind of in the same league. I agree with that. Can you explain why the president hasnt nominated yellen yet . Do you have a sense . You talk to people. Well, i think theres just, you know, they have to make sure theres the full background vetting and what have you. But i mean the big explanation is how delayed things got with the summers fiasco which i dont think anyone can say was handled well. Do you think he likes yellen . I i think janet yellen will be a very good Federal Reserve chairman. Bernankes not staying for sure. And i think its extremely unlikely at this point that ben bernanke will stay. Okay. I would and weve got to go. I thought the president when he got, you know, the syria situation sort of got somehow whether you agree with the way it was handled or not, its on the back burner now. And a couple of other things and then i thought he got his i really thought he got his mojo back when the republicans became public enemy number one front and center for him. Seems hes most comfortable in that position as an adversary fighting for what he calls the middle class against republicans. I thought, wow, hes back in the stride with that speech he gave and he still is. Theres going to be plenty of fights over the next few days. Its not helping. Thats why its so intractable. Thats where he gets his i dont know, really hits his stride, though. Anyway, you want to comment on that . No. Very nice. Thank you, though. Youre welcome. Thanks for coming in. When we come back, Athena Health is helping doctors and hospitals move to the cloud. Well find out whats driving business and talk about the impact of Health Care Reform. Great to see you this morning. Squawk box will be right back. Apple pie, the statue of liberty, the bald eagle. Symbols of america. Now, we add one more to the list, liesman. The cnbc all America Survey is out and senior economics reporter joins us with the results. Cnbc is keeping America Great one survey at a time. You really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . Welcome back to squawk box. Checking the futures right now. We do have green arrows across the board with the dow looking like itll open up about 36 points higher. And the s p 500 about three points higher. In five days, Health Care Exchanges, one of the supporting pillars of the Health Care Reform laws will be open for business, but how effective will they be . Joining us now chairman, president and ceo of Athena Health. What are we facing at this point . Well, you know, ive been thinking of it a lot like nation building. Its not working, were scared, were watching Health Care Going the wrong way and call in the shock troops and the federal governments going to make you get on an emr and make there be a market and then, you know, we get tired or get distracted and sort of recede and the people grow poppies and go back to terrorism or maybe theres a little left and it takes hold. Right now were shock trooping into the lack of real choices in health insurance. Theres not a lot of products. Now the fact that we made Product Management largely illegal, you know, 15 years ago when we didnt like how you couldnt get a brain replacement, you know, and all these things that werent included. Were trying to create it, trying to say, boy, if we could just get it going, thered be choices, a market, et cetera. The products on the exchanges are largely identical. Which means you can get 70 of the same thing paid for. So at the beginning, theres not a lot of technical infrastructure, not a lot of choices. But the government has actually gotten people to show up either by force or by love at this thing. And there will actually be something that gets called a marketplace. Maybe the shock troops will recede and theyll be something. I know the problem with Health Care Reform is its attacking the access problem and getting people into the system. Not necessarily attacking the cost side or the supply side. Right. But i do wonder if the cost side will get dealt with somehow because the government is now saying theyre going to pay 20 to 40 less a lot of doctors for things and thats going to force efficiencies. Sure. The sheer raw Emotional Energy of the federal government not wanting to spend this much does work. It does the governments going on anything. People figure out how to scoot around. And if you look at our data, we run most of the risk contracts in massachusetts, which is the first state to go to these payments outside medicare. But it was actually the blue cross plan that said, shucks, i better do Something Like him so i dont stand out. And theres been an 8 pullback in hospitalizations for the first time in 16 years. Theyve gone up every year and all of a sudden they drop down. There is Savings Energy going on. How long it lasts, well see. But its exciting to see something happen. And, you know, thats for the delivery side. The exchanges are for the supply side, for the actual product. Maybe when it gets going, these guys will lobby washington and say, hey, can we do some Product Management. Can we offer a real bronze product which doesnt have in vitro fertilization, doesnt take care of you if youre in stage 4 cancer. We need the ability to shop and choose. Can any of the providers exit the providing space because it gets down to where they say im going to do Something Else . Oh, the exiting is going on. Isnt thats whats going to happen . We merge. And whats going on right now is record mergers of hospitals youve seen some of the Public Hospital chains exit and merge with each other. The nonprofits selling to the profits. Its the the dinosaurs are mating as the icecaps melt. Youre adding all this demand to the system. The complexity, its filing your taxes every time you see a patient. Economics 101, the supply goes down, it gets harder to get what you want. The New York Times copped to it the other day and how hard its going to be. Two things go on. One, is hospitals try to collude to get prices up so they dont die. Who could blame them . Thats one thing the governments watching. Do you think the governments really watching . Oh, yeah, because its their policies creating the vertical monopoly situation. Theyre trying to go in there and whisper, theyre starting. The other thing youre seeing is collapse. The hospitals are merging now, pretty soon, therell be no one to merge with and theyll start to die and thats when i cant wait to see the Senate Hearing where the nones come. You know, you told the sisters of agony and mercy to get on electronic measures and we did our part for america and now were broke and America Needs to do its part for us who provide the care and the bailout package that will come. And theyll say you did it for general motors, you did it for goldmember, how could you not do it for nonprofits. Look, there was i think hospitals are taking on more risk than they might be able to chew on and handle. Jonathan said something very important. Which is in massachusetts, you saw through these account Care Organizations an impact on actual provider behavior. And were seeing that nationally. Thats just not in massachusetts. Last 12 months, medicare up 2. 3 nominal, thats unbelievably low. And you cant attribute that to the economy because Medicare Beneficiaries arent affected by the economy. What is it . And i think its a lot of this stuff. The key is, theres a lot of spending is so high, the prices are so high. Its a juicy place to enter. In massachusetts, the actual critical agent was a hedge fund or a private equity fund. And started going to employers and saying, if you offer your employees total coverage through us without, you know, harvard and expensive facilities, well give you 20 less. And if they really need the rare, open heart surgery, well send them to harvard at our expense. And all of a sudden, doctors started flocking to what used to be the stepchild of the market and theyre making money, saving money. Is sebelius leaving . Do you think this guy could be secretary . Id have my foot so far in my mouth. I think things like athena are doing, you know, at this point, its about implementation and hes doing more good here. And by the way, another thing that this is doing and places like athena, youre building out data that hadnt really existed before. One of the things they did, for example, ill give you kudos here, there was a report suggesting that Childhood Obesity was actually trending down. They went out and looked at their patient record and how many kids . Well, 40 million patient, so about 10 . A huge sample and said they didnt see any it wasnt going up, thats good, but it wasnt going down. We need to do more of as this kind of becomes available pulling that into even official statistics. Wait a minute, your name is bush. Hes related to billy bush. Lauren bush. Jenna. Jenna. But what i like about the diabetes thing, we did that pro bono. But as the hospitals take on risk, the Networks Start to form, they have a profit incentive to figure out if their drugs are working. Weve got to go. Thank you. Coming up, oracles Larry Ellison making the waves. But tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. Thats why we partnered with hp to build the new nascar fan and media engagement center. Hps Technology Helps us turn millions of tweets, posts and stories into realtime Business Insights that help nascar win with our fans. Welcome back, everybody. Oracle team usa completing one of the greatest comebacks in sports history and winning the 34th americas cup. They were down eight races to one and facing elimination, but oracle managed a string of victories to reach a winner take all finale and prevail 98. Now oracle ceo Larry Ellison has the right to set the parameters for the next americas cup and continue his quest to make it more television friendly and relevant to young fans. The cup rules allow for the champion to select the site and the type of boat to be raced in the next series. Investors are growing more dissatisfied with oracle corporations years of high pay for ellison. Some shareholders complain that ellison who founded the Software Giant beneficially owns a quarter of the companys shares, continues to receive tens of millions of dollars of Stock Options every year even when oracles performance has been mixed. Ellison received compensation valued at 76. 9 million. Oracles stock raised 12 in those months but plunged on the Second Straight Quarter of flat sales. The discontent could produce a showdown at the technology companys october 31st annual meeting. Yeah, interesting since that falls on halloween. Kind of spooky. Air products announced its going to be looking for a new ceo. This comes about well, about three months after bill ackman unveiled his stake in the company. Agreed to vote in favor of the companys nominees for directors at the 2014 annual meeting. Ackman first confirmed his stake in the company to cnbc on july 31st. Since then, the stock up about 2. 5 . Also, the allamerican survey, it is coming up next, find out how americas top executives are feeling about the economy. Were going to take a quick check on the shares of hertz. Cut the fullyear forecast because weaker than expected results in the airport rental business. announcer at scottrade, our clients trade and invest exactly how they want. With scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Awarded fivestars from smartmoney magazine. I got this. [thinking] is it that time . The son picks up the check . [thinking] im still working. Hes retired. I hope hes saving. I hope he saved enough. Who matters most to you says the most about you. At massmutual were owned by our policyowners, and they matter most to us. Whether youre just starting your 401 k or you are ready for retirement, well help you get there. God bless america land that i love stand beside her and guide her through the night nice love shot there of the capital at the white house. Steve liesman is here with the results. Take it away. Thanks, andrew. Unfortunately, a dip down, back towards and this comes after the last quarter where we had the blip up. Take a look of here, Economic Optimism back on the decline, back to the levels in march 2012 and also here, those saying good coming down, as well. Assessment of the current economy and concern its not going to get better coming down. Only 28 saying it will improve. Come over here and take a look at pessimism picking up. 44 saying 35 saying the economy will get worse and 44 saying the current state of the economy is poor. In fact, when you put together those who say the pessimistic about the current economy and pessimistic for the future, the 61 is the highest weve seen in two years. And well get into what might be behind that rise in pessimism here. Lets take a look now at those who are pessimistic. And this is whats concerning. Right kind of in the middle class area. College grads. This is their change from the Second Quarter. The increase in pessimism. Those 50,000 to 70,000 in income. They picked up, white collar workers picked up. And of course there, you see Tea Party Supporters also picked up their pessimism. Moving on, i want to show you where this pessimism may come from. And we track two things that have for many, many years here. What your expected wage gauge in the future and expected increase in home values. Lets just be clear. Were not near the worst levels weve had here in march 2011. But we have this nice pickup here. We were 3. 9 on wages. Home prices were also up in the 3 range and now just 0. 8 . Its worrisome that we came back down after the nice increase we had. There were two areas of positive feelings. We asked people, how are things compared to a year ago . This comes off of our election coverage where we asked for four years ago. I think were going to ask this now. Portfolio values, better beating out worse by quite a bit of margin. How your Housing Market is doing in your area there. Thats up. But your assessment of the job market negative, system negative, and the u. S. Deficit all negative. Coming up later today. How youll feel about the stock market as well as more stuff to be released on monday. Back no you guys. That is really good, steve. You know whats striking about that . What is . The share of people that say the economy will improve is lower. Than it was in late 2008, which is kind of scary. Just reality. Late 2008, maybe a lot of people on main street didnt realize. We didnt know. It wasnt quite this is stuff we have to watch, especially on the eve of another bruising debt ceiling battle. Sentiment last time around, people are out there and we have the syria issue came up before this and maybe the debt ceiling creeped in. But also there could be real factors. The sense of their wages going up and home prices going up. If that sense is coming down, then those are real factors that are out there. You know, one of the things that struck me health care, 15 , only 15 think things are getting better. Is that because were on the eve of obama care . We have some we have some crazy health care numbers. And were going to be reporting these throughout the day. Theyre also not supporters of obama care either. Or supporters of a lot of the elements of the bill. But and we asked our we do democratic and republican pollster. Its the law of the land, lets give it a shot. Theres some thinking there that lets not get rid of it just yet. Lets see if it works. And i think the stories, theres a lot of negative headlines. And to the extent that there is going to be some benefit, it hasnt filtered in yet. Government program. Government programs arent like new where you can retract them. Theyre stuck. For a long, long time. Most people dont actually know what theres this sort of nobody knows what it is. Its interesting, ill have some numbers for you. On the individual provisions, the theory always was that the individual provisions are more popular than this vague rahm was ready to do a bill like that that would have been bipartisan to get the most important things. To cover everyone. Preexisting conditions. They were ready to do that. Kids, get rid of the boundaries youre looking youre mad. Im not mad. He was ready. No, you were listening youre letting me finish. Youre letting me finish like this. Can i show you one other number, which peoples feelings on the debt ceiling debate. We asked people a qualitative question. What are you more concerned about . Theyll not raise the debt ceiling and the u. S. Could default and some programs will be defunded or that well raise the ceiling and go more into debt . I want you to look at the last line. Dont know unsure compared to june. People are making up their minds in a bigger way here. And whats happening, theyre splitting evenly toward the top answer and bottom answer. Plurality says were more concerned about debt. 47, 41, but both of them went up in equal numbers. That 47 , people are more concerned about taking on more debt than raising the debt ceiling. Do they understand what happens if we dont raise the debt ceiling . We try to ask this in a way that gives you every opportunity to understand the consequences. We say the u. S. Will default and some people wont get paid. So we do tug at the heart strings and they still say were more concerned about the debt. And the full faith and credit of the u. S. You can only go so far in a poll question, but i think we ask it in a fair way. How do they get to that answer . Because people are concerned about debt. Its a natural, almost instinctive feeling. Peter, tell me what you think is happening. When you say Mortgage Rates would rise, lay out the scenario. Heres the problem, when things can go awry in that kind of way, they can go awry in such a complex set of ways that you dont, its not even worth trying to trace out all of them. You get to the point of higher Mortgage Rates because people would be less willing to buy government debt. I think if we delayed Debt Service Payments for the federal government, there is no question in my mind that Interest Rates on federal debt would go up. That in turn would play out in the mortgage market. If you have that kind of shock that spreads. If you create risk in a riskfree rate. That makes sense to me. I dont think we get there peter. I think this shows up in the poll. You have to keep hitting the reset on the button. The buildup Consumer Confidence. I talk to bill dudley on monday. Do what youre going to do oh, sorry. Was it brinksmanship or brinkmanship . Think about that. What do you think it is . Brinkmanship. Brinkmanship. Lilys down about 4 . They had two late stage trials for a new cancer drug appears to be an antigen sis drug which helps the no vascular system go to the tumor. It worked for Gastric Cancer but did not work for advance metastatic Breast Cancer. They were hoping in combination with that it would help and it didnt, and thats the only thing i can see, the stock closed at 52. 61, its bidding 49. 81 right now. I think it was disappointing late stage data for the Breast Cancer side of it. Anyway, we will thank you, steve. Its all on the web. Going to be out there. The whole poll. Weve got a bunch of stories throughout the day. Health care, all this stuff. All america. I just liked its called the poll like that even though its always depressing. At least its all american. Had a little blip last quarter, people were excited. Well, now were back to. Thats why we didnt taper. The walmart stuff, maybe the fed knew about the walmart stuff. People think the fed leaks to you. I think you leak to. Youre more important. Do we have to talk about leaking . Lets go. Yeah, nice. Thats nice. Thank you. Squawkward moment brought to you by steve liesman. Peter orszag will be with us for another 20 minutes. Dont worry about it. Up next, thinking of buying shares of twitter. Find out what Portfolio Manager and twitter shareholder plans on doing when the company hits the market. A bit of news from the company, carrying instant replay nfl footage. Saying they could generate revenue for the company and the nfl and other people involved which is always nice. Its amplify service already on twitter allows broadcasters to show video clips and ads through tweets with whats coordinated on tv. The nfl will package ingame highlights and other video that are inside tweets that are sponsored and include a short ad from a marketer. The tweets will be sponsored and distributed by the marketer during games. The nfl and twitter will both receive a cut of that. Maybe a little squawk moment should be in there too. Little squawk sports moments too. Well think about that. Well be right back. [ female announcer ] youre the boss of your life. In charge of long weekends and longer retirements. Ask your financial professional how lincoln financial can help you take charge of your future. Welcome back to squawk box. Our next guest was an early investor in both facebook and twitter. Joining us on the set, kevin landis, chief Investment Officer at the firsthand Technology Value fund holds 600,000 shares of facebook and over 1 million shares of twitter. Wow. Whats twitter going to go for . Whatever it is, it should be higher. Im sure. What do you think twitter is actually worth . Well, its interesting, we bought it at a valuation of about 9 billion in q4 of last year. And now people are talking about 12 or 13, sounds reasonable. Its still only about 1 10 of facebooks market cap. Ask yourself, is facebook worth ten times what twitter obviously facebooks worth more. I have a different question. Do you look at the facebook ipo. Was that a success or massive failure . Yes. Well, last time i was here, it felt like which one was it . Last time it felt like a failure because i was having to defend owning it at 31. 50 when the stock was breaking down into the teens, right . Now youre happy. But you had to wait. You had to wait a whole year. You could have picked that up in the interim. Sure. But sometimes being stubborn pays off. You have to go back and pretend youre Warren Buffett for a while. Then it works out. Where do you think twitters going. Youre still invested, you have to assume its going higher. Right. Look, when you buy shares on the secondary market, so for the first six months, doesnt matter. So i think for us, we care about whats it going to be worth a year after the ipo or a year and a half. Where do you buy most of the stuff . We had barry on this morning, is that where you buy most of that stuff . Second markets work for us on facebook. I think we bought most of our facebook shares on Second Market. You havent sold any . You rode it down and rode it back up . Yeah. So our fund can only buy stocks when theyre private or really, really market caps. Cant buy anymore. So once we let it go, we have to let it go. It might get to a market cap at one point. No. So when you first sat down and said whats this thing on my wrist . Its this jawbone up. And you have the shine one on. Weve had actually the coos of both of the companies on. Its our number three position, okay, facebook, twitter, whats next . And i say, i hope its jawbone, it should be. Thats the next domino to fall with the advent of smartphones. Your smartphones like the Communications Hub on your person and it can connect with all sorts of great things. Blue tooth is not just for something you stick in your ear, right . Blue tooth could be for a lot of Different Things including pulling lots of great data. So if thats your one, two, and three position, whats your four and five . We could talk about every single thing we own. Im curious. We have a big position in a Company Called sun run, which is sort of very similar to solar city. We own solar city earlier this year and sold it at a nice profit. So was that elan musk . Yeah, hes been good to me. Do you have tesla . We own a little bit of tesla stock, but it kind of feels like owning omega. Well, in terms of how much no, no, it was a Great Company and great stock we made a lot of money off. Do you own a tesla . I own a fisker and the most i can lose is about 100,000. Because thats the car. Itll always be beautiful even if the software stops and it becomes a brick. Quick question, i know you dont have stakes in either, but i think since you invest in the app economy and all these things. Does apple or Google Android win the day . Okay, so we do have a public open end fund that buys listed stocks all the time and apples our biggest position there. Right now, there arent too many stocks that you can say are inexpensive and are growing. Apples on that short list. Most of the rest of it either have to buy intel which isnt going anywhere and microsoft that isnt going anywhere. Everybody comes on this set and says apple is so horribly undervalued and yet i look at the screen every day and doesnt seem you cant argue with the market. It is what it is, right . You cant argue, the markets wrong, the markets wrong. Iphone or beckys blackberry going to win . Yeah, you going to pick up a new blackberry . I could barely get that question out. Im about to get both. What do you have there . Ive got both. You do . Yeah. Its because of the you type. If you type and you write a lot of emails. Just two. Two with me. Two devices then ive got an ipad. Wheres your Microsoft Surface tablet . Right there. Hes got a Microsoft Surface, a mini this is awesome. This is unbelievable. You need the keyboard. Thats going to be a great time capsule some day. Thank you for being here. Appreciate it very much. Thank you. When we come back, final thoughts from our guest host peter orszag and the top of the hour, state of autos and the economy. Jim lentz. Right now the futures have been indicating a slightly higher open. The dow futures up by about 38 points above fair value. This comes after five days of declines. Squawk box will be right back. Lets get some final thoughts from our guest host. Peter orszag, former omb director under president obama. Peter, we have watched the market yesterday really get concerned about whats happening with Consumer Spending. You know, you heard these reports from walmart and that spooked the market. Do you see any of those things or worry about the economy really taking another turn down . Well, again, i think despite, you know, monthtomonth fluctuations, were actually not great, but decent shape for the federal mess. Consumer Balance Sheets have delevered. Next year looks decent if not for this other stuff. Whats decent . Is that 2 or 3 . Close if we didnt impose further consolidation at the federal government level, i think 3 plausible for 2014. And we worry because the fed when it decided not to taper cited economic conditions. It cited washington as a side note, cited economic conditions. We just wonder if theres something they know that we dont. No, just that monthtomonth things look weaker. The labor market remains. The share of americans with a job, which is the ultimate marker has not changed at all since 2009. It was 62 to 63 before the crisis, 58 to 59 , and its gone sideways. What has to happen . You said yourself that you wish looking back you knew more about what you knew right now when you were doing the job at the omb. Well, part of what had to happen. This comes back to your allamerican survey. It just takes a while to work our way out of the aftermath. This is a really were mostly there. Were now doing this to ourselves. Thats sort of unavoidable following a financial crisis, the deleveraging process. What were doing now is completely avoidable. The biggest constraint on growth has shifted from being inevitable aftermath to selfimposed harm. By washington at this point, if you were going to pinpoint the single biggest constraint on growth this year, it is what the federal government is doing. No way around that, though . We talked at the beginning and you dont see a way out to get through some of these things. I remain optimistic, but i its hard to see great outcomes here. Now, the best outcome is both sides kind of say, this is the best outcome, both sides say well push this off for another year. Thats like thats the good outcome and thats not a great outcome. When do we ever get to any of the big issues again . Tax reform, all of the things we were talking about a year ago as potential conversations. That were not even talking about that, talking about shutting things down as opposed to actually doing something. I dont think anything big will happen until one of two things happen. The first is that one party wins the trifecta of dominating that would have to be years from now. And the second is that somehow the world changes and were forced to act. And without one of those two events, were going to keep rolling. Do you have a feel for the senate in 2014 . For ha while, looked like a possibility for the gop, do you think they messed that up now . I dont know. Ill be happy to take that bet. I think itll remain democratic. Really . The house will remain republican. Yes, it will. Well, again, be in this split government. Will the senate become closer or will democrats add i dont have as great a feel for that. Its so dependent on individual races. Its not going to be a big enough swing to shift to the republicans. Weve got three more years. We got this is welcome to the future. Hey, peter, thank you very much for coming in today. My pleasure, good to see you all. We could count on the private sector to do a lot of the heavy lifting. That would be nice for the next three years. Well, the good news story, theres a lot of dont forget, a big thing going on is the health sector, for example, is changing. And a lot of that is driven by private Sector Companies at this point. Thank you. Thank you. Good to see you. Good to see you too. When we return, toyota hops in the squawk driver seat. Jim lentz will join us for the rest of the show. Later, well discuss what options are ahead for washington. Well discuss that more as the october 17th debt deadline approaches. And alice rivlin will join us along with kevin hasset. Stay tuned. We went out and asked people a simple question how old is the oldest person youve known . We gave people a sticker and had them show us. We learned a lot of us have known someone whos lived well into their 90s. And thats a great thing. But even though were living longer, one thing that hasnt changed much is the official retirement age. The question is how do you make sure you have the money you need to enjoy all of these years. The breaking news about new export plans this morning. Toyotas north america ceo jim lentz will join us for the hour. A high stakes showdown over the federal budget can lawmakers negotiate a compromise in time to avoid a Government Shutdown . And the carbuying process can be different for women than for men. True car claims it can level the playing field. True car makes it easier to go in by yourself. I dont need to bring a dude with me. Is it true or sexist . Jane wells reports as the third hour of squawk box begins right now. Welcome back to squawk box here on cnbc, im joe kernan along with becky quick and Andrew Ross Sorkin. A little better than it has been. Up in the 40s. Not a great day yesterday. Overseas in asia. It was mixed except for seems to be working today. Nikkei, pretty good day. Europe was down, based on our markets yesterday. But those losses have narrowed, as well. Now weve got, you know, fractional losses across the board. Lets talk debt battle among this weeks market mover is the debt battle in congress. That it is. Yesterday, the treasury said it would run out of money by october 17th with no new increase in the debt limit. A house vote to raise the debt limit is possible. That could come tomorrow. The senate is on track to vote on saturday for legislation to avert a Government Agency shutdown. In the last hour, we spoke to former omb director peter orszag. The core problem here is for the past several decades, the political system has been polarizing. And at this point, theres no middle in the congress. If you look at the voting patterns. That thats the core problem. We keep having these episodes thinking this is the last one. Were going to get through whatever were going to get through and itll be back again next year. Well talk more this hour with alice rivlin and Kevin Hassett. Take a look at bed, bad beyond. The Company Posted better than expected earnings and revenue yesterday after the bell. Current quarter guidance at the upper end of the street forecast. Also watching shares of, yep, said it again, blackberry. It is confident it can find the money to fund the 4. 7 billion bid for the smartphone maker. Shares fell yesterday, though, on doubts about the bid. Tmobile announcing it is going to stop stocking blackberries in the stores saying its no longer efficient to keep the devices there. Finally, announcing its going to be looking for a new ceo. Consider this a win for bill ackman comes a couple months after investor bill ackman did unveil that stake in the company. Now agreed to vote in favor for the companys nominees of directors a the the 2014 annual meeting. And ackman confirmed that on july 31st. Since then, the stock up about 2. 5 . Its in the right direction, but not exactly you broke that. I broke it . Air product thing . Well, yeah. You forgot already . You forgot. It was such a big scoop in beckys mind. I was reading something. What . I broke what . My blackberry. Made in the usa. Made in the usa taking on a new meaning for our toyota today. Announcing this morning it plans to export the carollas built in mississippi. Joining us now is our guest host, jim lentz, and phil lebeau also onset with us. I was recording that for the opening. I was like become a big export and i got confused. Were exporting . And now i understand. Thank you. If i can understand, anyone can. So were making the toyotas here. Yes. Its an American Made product and were exporting it from this country down to latin america. Yep. Thats a good story for everyone involved. Its adding carollas to that mix coming out of mississippi. But last year as an example, we exported about 124,000 vehicles made in north america to 23 countries around the world. Why . Why dont we buy them here . Why . I mean, we already are fully supplied in this country. Becky doesnt want to give any natural gas to anyone else. Why should we give our carollas to other people. Well, i think its good for u. S. Manufacturing. It is. Last year we produced about 1. 8 million vehicles here in north america. So over time and part of its a hedged strategy against yen movement. Yes. That we will make north america a much larger manufacturing hub that we can send vehicles elsewhere. Now, the other reason for it, there are a lot of markets around the world, the middle east is an example that want large u. S. Made vehicles. Fullsize cars like avalon, fullsize suvs that they cant get out of japan. We are the only source in the world for that. We will be the only source in the world for the midsize highlander and hybrid, as well. Why . Why . Because japanese people dont want if you look at the markets around the world, were not going to be increasing capacity in japan, obviously. They will supply, you know, smaller vehicles to more developing countries. I see. And we can concentrate on larger vehicles for other parts of the word, even vehicles like carolla for latin america and the caribbean. Jim, how do you feel about capacity right now . For you guys. Youve got obviously a little bit of capacity in your system here in north america. But everybody has been increasing how many vehicles theyre building as sales have picked up . How much capacity do you have left here in north america. Most of the lines running fairly close to full capacity. In the last 20 months, we have invested about 2 billion, 4,000 jobs in the United States to cap up some of that capacity. So were building more highlanders, more rav 4s, some of thats online, some of it is yet to come in the next couple of years. Which brings up the question, theyre close to capacity. Are we to the point yet . Will we be to the point soon where you say lets add another line, lets think about adding another plant, although i know everybody doesnt want to make that huge capital investment. How close are we to saying we need to do further expansion in north america . In our case, were not there yet. When we look at our sales projections, we take a look at not only our capacity to build those vehicles but what the global capacity is. And prius is probably the best example of that. Could we is there enough demand in the u. S. To build prius here . Yes, there is. But theres enough Global Supply thats not necessarily necessary. When you look at the future of cars, you have a partnership with tesla. Yep. Do you look at batterypowered stuff and think that is the future . Or do you think its going to ultimately be something totally different . I think its we look at it as a portfolio approach. Were going to continue to improve regular internal combustion engines efficiency. Hybrids are going to be the mainstay of our business. Really . For how long . Ten years . No, i think its well into the future. No natural gas car . But you can use a natural gas engine in a hybrid vehicle. Because remember, hybrid basically allows you to combine an engine with electric motors through batteries. So the engine today on a prius is an internal come pugs gas. But theoretically, it could be a a when you think a company like that has made a bet on one particular technology. Theyve carved out a great niche in the marketplace. Weve used their battery in our rav 4. We have a great Battery Management system that can work with heat better than any other battery. Thats the big challenge with batteries. Batteries dont like it when it gets too hot, too cold. It affects the range. And the tesla has done a great job in managing that. Longterm, i think plugin hybrids will be the next solution. That five years from now, ten years from now . Im driving a plugin today and well sell probably around 12,000 plugins of our 250,000 total hybrids. So its a small piece of it. But it will increase over times. Hydrogen fuel cells, our First Hydrogen fuel cell and many others in the industry will come in 2015. So we dont know what technology the consumers are going to embrace. I have one more tech question. Yes. Driverless car. My wife has a drivers license, she doesnt like to drive because she doesnt think shes a great driver. She says it doesnt matter because by 2020 according to google, or 2015, well have driverless cars. You have one. You dont drive your car. True. What is the toyota view of when ill be able to sit in the back without someone in the front . Not in your lifetime. You just ruined it for everybody. Who are you going to blame when you run into someone . Well, i think whats going to happen our vision of Autonomous Cars is a copilot. Thats an example. An airplane can fly itself, but i dont think you want the pilots sitting in the first row, you know, having lunch. So we well, i dont know. But we see Autonomous Cars as being able to enhance the skill levels of drivers. Through technology, theyll be able to see better. Theyll be able to stop faster, theyll be able to react better. So we see it as enhancing those skills, especially as you look at older drivers today. Today there are five generations of americans driving cars. People are driving into their 90s. The idea of having censors linked together that can react quicker than drivers is going to allow people to drive much later in their lives. I think weve gotten within the last six months, the Auto Industry executives have fallen into the, me too, im working on Autonomous Vehicles too. Everybodys working on it. Sure. And i think the bottom line is what im hearing from a number of automakers is copilot. Were not going to see fully autonomous how many ads have you seen of someone backing up with an impending disaster happening and you hear the alarms go off and they stop either its another car coming right. Thats what everybodys advertising now. But so the whole promise of what google is doing, what does that mean . Well, im not sure if google is really talking. I think they backed off a little bit of their position of totally driverless. Part of the by challenge is going to be on the regulatory side. Could it happen over time . It probably will. But i think by 2020, i think that may be overpromising. You know, because as you say, a lot of vehicles today have a lot of these sensors together. The Autonomous Car works them into a net. Puts additional cameras. You just you have a fantasy all these cars are buzzing around and youre waving at each other. And its huge implication for Auto Insurance. If it all happens, it could change everything. But see an Autonomous Car that can stop if a vehicle stops in front of it before the driver hits the brake will do that same thing. So its going to do everything youre talking about, but we believe somebody is always going to be sitting behind that wheel to take charge. I think the regulators will require somebody to be there. I dont think theyre going to say its okay for you to drive a car without being behind the wheel. Never say never. But i think this decade, i dont i was very excited and now im im sorry. You know, with everything we use and depend on, things do go down once in a while. They do. And you dont want that system reboot. Or im not getting any emails right now. Gosh, my cars not getting any navigation instructions right now. I mean, whoa. You have a driverless car. Thats the other thing i dont understand. You dont have to do anything. This is true. This is true. Well have more with jim and youll be here, or are you leaving . No, im stepping out, having some coffee that guy says he owns a fisker have you driven a fisker . I have. Theres a dealer in chicago who buys used fiskers. He says the stories he hears from people when he tells them what hes offering them. Thats it . Thats all im getting . This guy said it might be a brick, might never run. Possible. All right. Coming up, big question, are women at a disadvantage when it comes to buying a car . You actually have a view on this, becky, thats a premise of an ad by Online Service true car. Is it true or is it sexist . Jane wells will report right after the break. Still ahead, the countdown to the Government Shutdown. Can congress find a path to compromise on the budget . Also the American Enterprise institute, right now, though, as we head to a break, lets head to the squawk box market indicator. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the american people. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. Welcome back to squawk box. Take a look at the futures right now. Groan a green arrows across the board. S p 500 up about three points for those listening at home and the nasdaq up about 12 points. Ebays paypal is acquiring brain tree. The payment platform is used in popular applications like open table and uuber. Ebay says the deal will impact the 2013 earnings by 1 to 3 cents per share. You know that buying a car can be a very different experience for a woman than for a man. True car now, though, is claiming it can level the playing feed. Jane wells joins us with more on this story. Jane, good morning. Reporter oh, becky, i know youve had a rough time, ive had a rough time. There is no middle ground, though, on this story. When people think this true car campaign is so true, others say its so wrong. Heres the deal, nearly 40 of all new car buyers are women according to jd power and a lot of them hate it. Right. And at the dealership i was trying to hold my own and its kind of tough. This ad from true car has really hit a nerve. True car provides free pricing info, gets you a guaranteed price from one of the 6,500 dealers in the network. Gets paid a flat fee by the dealer once the cars actually sold. But in reaching out to women this way, does it make us ladies look helpless . Ad week says, yes, quote, apparently women have to Research Pricing while men have the magical ability to guess it on the nose like theyre securing a price on the price is right. Has the ad worked . Well, traffic to the site is up 40 . I think what we did was took a very disciplined and studied view of saying what is the issue that women are talking about . What is creating their fear . And in no way was it meant to demean anyone. True car makes it easier to go in by yourself. Were, in fact, positioning the female buyer as a strong buyer who has the ability, now, to make great choices with great information. Citing a capital one survey claiming 4 out of 5 women bring a man with them to buy a car on the lot. This woman who didnt want to be interviewed was finishing up the paperwork from a car she bought online. A study says women are built more aggressive negotiating online than facetoface. By the way, true car has drawn fire in the past from dealers questioning its business model. Its been investigated by several states. But it has survived all that, goo is, and this your revenues are expected to double to 135 million. Back to you. Jane, we talked about this before you did this story because i definitely had experiences with it too. Its difficult to walk in as a woman and i found that as recently as a couple years ago when i tried to buy a car when i was pregnant. Dealers didnt want to talk to me, they wanted to talk to my husband. And there was a big round about way where i said, well, clearly you dont work, didnt want my office number. Because i walked in when i was pregnant. Reporter im so angry when i hear this because the same thing happened to me. Long time ago, i was buying myself a brand new corvette paying top dollar. I was treated so poorly. But, again, i also dont like the whole game of it which is why onlines better. The last two cars i bought, bought one through costco, fantastic. And the one before that, camry through usaa. That was also great. True car manages usaas buying program. Yeah, i have to admit, i am not somebody who likes the entire game of it. But honestly, i walked in as an informed consumer, done my research, my homework. It was to buy a minivan. My husband didnt want any piece of that. And i really had a hard time getting people to talk to me. Even when he said talk to her because i dont want this. I understand the appeal for women who have had a tough time. And like i said, this was not a long time ago, this was 2 1 2 years ago. The car guys, jane, i dont know where they find them or whether they become car guys. Ive had the cadillac guy said to me when we were just trying to get a better deal. He goes, you know, im just getting the feeling that maybe you people are not cadillac type people. Really . So its not just women . No, its not just women. Youre not meant to drive cadillac. I think there is when i dealt with the manager at the store, it was a different story. He treated me very different. I should defer to jim lentz who is onset with us. I cringe when i hear these stories. And i can tell you the dealers in general are making a concentrated effort to change the process in the stores. And if you look at the toyota lexus dealers, theyve invested about 7 billion in facilities and people and process in the last five or six years to get away from this. And we spent a lot of time with our dealers is this a training issue . What is it . Its a hiring issue, a training issue. Its moving away from an old process to what a new process is going to be. I mean, you and i may have gone in to buy a car in the past that took a long time, we put up with it, we didnt like it. Women arent going to put up with it and younger people i can assure you are not going to put up with do you remember fargo . Got a deal on the undercoat, 399. Can i add one thing, guys . Yeah. Reporter by the way, i talked to a dealer who was in the true car network and he was very interesting. By the way, true car is targeting millennials. He has completely different sale staffs for online versus in the lot. Completely different training and used to put their worst salespeople on the internet. He says, no, no, no, you put your best salespeople on the internet. Get you in the door, do a deal. But its a different style of selling. You know, its funny, saturn had that approach and i wondered why it didnt work better other than people didnt want the cars. Being treated fairly when you walk in the door and no negotiations. Thats something i think women in particular, you know, just i dont want to negotiate. I dont feel comfortable with it. I know what i think is the right price. And a lot of it is time driven. Their most important resource is time. They dont care if they necessarily get the best deal. They just dont want to get a bad deal. How the salesman identifies who is going to buy and who is not. I used to have a friend at ralph lauren the Clothing Store and they would always say its the people who walk in looking like the schlubs. You better treat everybody the same way. Jim lentz will be with us for the rest of the program. Define it. Is it a clothing . Someone who comes in looking a little schlubby. Oh. Thanks. Weve been bringing people together. Today, wed like people to come together on something that concerns all of us. Obesity. And as the nations leading beverage company, we can play an important role. That includes continually providing more options. Giving people easy ways to help make informed choices. And offering portion controlled versions of our most popular drinks. It also means working with our industry to voluntarily change whats offered in schools. But beating obesity will take continued action by all of us, based on one simple common sense fact. All calories count. And if you eat and drink more calories than you burn off, youll gain weight. That goes for cocacola, and Everything Else with calories. Finding a solution will take all of us. But at cocacola, we know when people come together, good things happen. To learn more, visit coke. Com comingtogether welcome back to squawk box this morning. Check out this tweet from bill gross this morning. He said that moodys and u. S. Treasuries are one happy family. He says maybe too happy. Trust s p, fitch and eagan jones. Saying the potential for a Government Shutdown. Moodys has a stable aaa rating on the u. S. Earlier this week, it said it expects the debt ceiling to be raised and the government to avoid a shutdown. Coming up, well have breaking Economic Data. We are just minutes away from Second Quarter gdp numbers and the closely watched weekly jobless claims number. Were back in just a moment. Looking at covered call strategies to generate income . With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Welcome back to squawk box, everybody. Were just a few seconds away from the weekly jobless claims and the Second Quarter gdp revisions. Rick santelli standing by in chicago. Steve liesman here in studio with us. And economist Jeffrey Cleveland joining us from los angeles. Lets get over to rick with the numbers. Our last look at Second Quarter gdp at 2. 5. The internals consumption stood pat at 1. 8. We saw the price index deteriorate a couple of tenths to up. 6. And the personal Consumption Expenditure quarter over quarter also. 6. Lets lock at jobless claims. Down 5,000 from 1,000 upwardly revised 3. 10 now becomes 3. 05. All you states that turn in your data, raise your hands. Well monitor to see if theres any anomalies. But for the moment, the notion of getting this close to 300,000 will be debated as a positive. And continuing claims, 2. 82 million versus 2. 79 million. I dont know, lets look at it. We were around 2. 64, were at 2. 63, no great change there. Up a bit on preopening equities as evidenced by the dow futures. Dollar index up a bit. But from a fairly low level. So it seems as though this data not too surprising with regard to expectations. Although you could say claims is a good 20,000 less than some of the expectations. Back to you. Lets bring in steve liesman. Steve, this numbers for real. This is not like the last couple of weeks. Right. Yeah, lets recap. We had two weeks of bad data because california and nevada were updating their systems. Nevada. Nevada. I learned the hard way. I know. Nevada or nevada. The whole thing, you didnt read it. I didnt read it. The people of nevada, theyre begging you. Its not optional. Its not optional. Can i talk about california and the other state . Did you know california was one . Nevada was the other. Nevada was the other one. Do you feel less urbane. Nevada, i said it the way she said it. Thats right. Why did you look at me no, you said nevada. So california and nevada. All right. What im trying to say is. You killed her with vigilante and Everything Else. Peter orszag. Orzog. Orszag. Im going to get the wrap. Youve got two guests coming up at 40. The two states have cleared their backlogs. The 305 is real, which means what we thought was not a real decline was real. Also, go the a little bit of confirmation of a better job market in the conference boards numbers, people saying jobs hard to get plentiful. That going up. Weve got the isms coming up next week. Looks like were in a little bit better shape now when it comes to jobs than we were. And well see about whether or not the weakness in august is perhaps revised or whatever happens to it. But anyway, its getting a good signal. I dont know where the miss was, becky, on the Second Quarter gdp revision. Usually economists get this more right than they get the first go round because they basically have the numbers here. Consumer spending unchanged. The price index down a little bit more than it had originally been estimated here. Lets see, Business Investment up a little bit. Housing investment up a little bit. Sales up a bit. What do you got there . Sales up a bit. Sales up a bit from 1. 9 to 2. 1. Well take it. Government was up a little bit from minus. 9 to that will still be happening. Minus. 4. Federal government and the state and local were actually a positive here. So i dont know where the miss was. It could have been inventories, thats the one thing thats kind of hard to gauge. Anyway, 2. 5 is the number. Weve been tracking a 1. 8 or so when it comes to gdp in the Third Quarter here. I guess we want to bring in jeffrey to get his thoughts. Lets do that. What do you think about this . Are we really looking at improvement in the jobs market . Good morning and here we call it, steve, we call it california. Just fyi. Put a nice put a nice little bow on the first half of the year. Weve got 1. 8 average quarterly growth. Congratulations. But the fed is looking now for a pickup, still a pickup in the second half. They think were going to be 2 and 2. 3 for the whole year. That necessaitates a pickup. We remain skeptical as to whether thats underway as steve already said. Third quarter gdp looks to us to be somewhere between 1 and 2 . And thats not a pickup. Thats more of the same. Claims, the claims data, the initial claims data already close to 300,000 before the fed decided not to taper. So i dont know if a 310 or 305 would push the needle much on that decision. And we dont have a lot of data here, ladies and gentlemen, before halloween. So were going to get one payroll print and were going to get Third Quarter gdp on halloween. And i think speaking of halloween, which apparently is a huge retail right. Day of the year. What do you make of what came from walmart . Did that spook you about the consumer . You know, im really keen to see tomorrows number, steve, tomorrow morning so the Consumer Spending and the pce, the monthly data to get a refresh for ourselves on q3 spending. But, again, were skeptical. We think the consumer given wage growth, given the lack of credit growth, given the lack of employment is stuck more in a 2 type spending track. And i dont see anything changing that. So im not really spooked or scared. But i want to make sure people understand that lower claims which is less firing doesnt mean hiring. Absolutely. In the economy, Something Like 4 Million People lose their jobs and 4 Million People gain a job during a month or so. And so the difference between the two is the 100,000 or 200,000 jobs that we chronicle. Helps if youre firing less. Helps if youre firing less, although one thing you want to see in a healthy job market is churn. You want to see people leaving their jobs moving up. That kind of churn has been missing. Part of the problem people have said is perhaps the Housing Market. Right. Cant leave and sell your house. Housing lock i think they called it and whether or not some of that is clearing. You have that somewhat better housing numbers, diana olick has been reporting about. And the fed is very interested in the effective higher rates on housing. Theres a lot of guys out there. I dont know where you stand on this, jeff, that said, hey, the Housing Market is robust enough to withstand these higher rates. What do you think, jeff . We think were seeing improvement. More or less, we spent the last five years not building any homes. So were whittling through our inventory. And naturally, some of that building is going to come back. We wrote an article on this. I think its moving, but its not going to be the 2000, 20042005 Housing Market by any stretch. And i was going to say, my favorite chart is probably initial claims versus job openings or job hiring, in fact. And you can see that deviation. And in your interview, you had a great interview with mr. Dudley. And he pointed to that saying, look, claims may be low but you still dont have the job openings you need to see in a churning, robust labor market. Two people for every job opening. Okay. Thank you all very much. Thank you. Coming up next, the debt battle in congress continuing with the senate vote likely to come on saturday, but tough fights ahead in the house. Were going to talk to alice rivlin and Kevin Hassett about a path to a deal compromise. And then much, much more from our guest host jim lentz. How the companys lexus brand is trying to lead the luxury auto sales. Nascar is ab. Out excitement but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. Thats why we partnered with hp to build the new nascar fan and media engagement center. Hps Technology Helps us turn millions of tweets, posts and stories into realtime Business Insights that help nascar win with our fans. I want peacocks. Peacocks . Walking the grounds. In tuscany. [ man ] her parents didnt expect her dreams to be so ambitious. Italy . Oh, thats not good. [ man ] by exploring their options, they learned that instead of going to italy, they could use a Home Equity Loan to renovate their yard and have a beautiful wedding right here while possibly increasing the value of their home. You and roger could get married in our backyard. Its robert, dad. [ female announcer ] come in to find the right credit options for your needs. Because when people talk, great things happen. Welcome back. The futures right now, they had been up 40, now theyre up 50. Started at 20, maybe well be able to hang on to this throughout the session. Other sessions have ended lower after positive starts on the day. And were continuing the Big Conversation about the nations debt threat. Joining us now to talk about it, alice rivlin, a senior fellow in economic studies at the brookings institution. And director of Economic Policy studies a the the American Enterprise institute. Were getting a little feedback. Are you hearing all sorts of Different Things there . Im going to go to alice. Play it out for us. What is going to happen here . Alice, you with us . Yes, i am. Just play it out, tell us exactly in the world according to alice, what happens here . Well, what happens, you know, the world according to alice. None of this would be happening. We would be acting like a sensible grownup country passing proposes bills and not even talking about yeah, but this is kindergarten. Were back in kindergarten. Whats happening is that the house passed a continuing resolution that would fund the government for a short period. And attach defunding obama care to it. The senate is going to take that off and send it back. And with any luck, we will keep the government open and not defund obama care. But then theres the looming debt ceiling coming up at us very quickly by october 17th, the treasury secretary says. He wont have enough money to pay all the bills. How embarrassing is that . I mean, nobody should be in that situation. Hey, kevin, i want you to jump in here. Just tell me this, though, is the aei view of the world, is ted cruz a force for good or evil. Aei doesnt have position except for that one. In my view of the world, i think that teds filibuster was an interesting thing. It actually kind of makes the point. I have to stipulate that i love to live in alice world, but we dont. And the fact is that every time we lift the debt limit, we have this theater. I looked through 1978 and almost every debt limit increase was a dirty one with stuff attached to it. 15 times democrats passed a dirty debt limit increase. A few minutes before midnight, before the extraordinary measures expired. And they do this over and over. Republicans only did it four times. When theres a debt limit, continuing resolution, then congress has to act. Most of the times, the politicians hang around and do nothing. Every now and then they have to do something. But in the end, theyve always lifted it. And i think thats going to happen this time too. Is the dirty version better than the no version . Yeah, thats like politics. Excuse me, its washington and theres politics and they have to pass something. And the republicans have all the leverage because obama care is going to be a real mess. And they want to talk about next year in the Election Year. And so whats going to happen is theyre going to give you like six months or want to give you six months of debt limit and then six months from now in the Election Year theyll be talking about obama care again and what the democrats want to do like they did last time get past the election. And kicking it past the election is something theyre going to pay for and its going to cost them something. Some condition that the republicans are negotiating right now. Thats why this theaters going on and its something thats happened over and over and over. Alice, do you buy that . And let me make one other point. If thats true when you think about the economy and markets and Everything Else, its going to add more uncertainty to the game because if were back in the soup in six months, that doesnt help anybody. I dont know what youre asking me to buy, but its theater and its bad theater. Its dangerous to the economy, even if we march up to the debt ceiling and then lift it for the short and longer time weve done damage, weve cut the confidence of the world in the u. S. Weve shown that were not a grownup country. And thats very damaging. Its very damaging to our economy and its damaging to the confidence do you buy the kevin version that ultimately this is going to be that democrats will only do this if its a dirty version . Do you buy the dirty version issue . No. It sounds dirty. No, the democrats would like a to get rid of the debt ceiling altogether. And to pass a clean cr. The better that gives them a chance to get regular appropriations, which is what we all want. Does this matter to you . This conversation . As executive running a big Automobile Company . The way i look at it is whats the consumer think about this . And because our business is driven by Consumer Confidence in Interest Rates. Interest rates are still historically low. So its all about confidence. If this undermines Consumer Confidence, itll have a negative impact on our business. Im just not sure if consumers after the sequestration took place in january necessarily think the world is going to come to an end again. Kevin, final word, is he right . Yeah, and thats the thing i disagree with alice about. The fact this has happened over and over and over again, Something Like 50 times back to the 70s. Theyre doing it again, doing this theater, its kind of annoying, but its not going to make all of our trading partners worry about the sanity of the u. S. Because its exactly what weve been doing. Whatever they thought last year, theyre going to think this year too because were doing the same thing we always do once again. Cynical view, but i sadly agree with it. Alice and kevin, thank you, guys, really appreciate it. Thank you. Coming up, we have much more with our guest host jim lentz, the ceo of toyota north america. But first, well be check in with jim cramer for a look at some of the stocks on the move ahead of the u. S. Trading de ii. Welcome back to squawk box. Up about 50 points on the dow futures this morning. Lets get down to the new york stock exchange. Jim cramer joins us now. And i dont know what to think, jim, quiet before the storm. We were looking for something outside of washington that washd dictate, give us an idea which way the market is headed next. We got up to new highs on the nontaper. But now i feel like i need something, what have you done for me lately . I think youre right. The jobless claims look good. We heard from steve this isnt necessarily a terrific number but at the same time, this gives you hope we have low Interest Rates, 2 hadn2. 65, the rates wea bit on that number. I agree, we keep reading the a kls abo articles about the decline in gdp if theres a shutdown and every afternoon seems to bring more selling, joe. Its impossible to say because its counterfactual but at this point im almost ready to say we might be doing better if they had done the 10 or 15 at this point. Just putting it off, there it is again. Now we dont if its happening next time. Maybe thats not true. I think that theyre not necessarily going to tell us theyre as concerned with the stock market. Theyre going to say were doing this for Mortgage Rates and we think its the right thing to do with the economic back drop. I think were tired of it and we need to get back to business. I think what happens is if we get any sort of deal in the government, immediately were just going to be talking about wheres the taper . So youve got these hurdles. Its just like endless series of hurdles. Im coming around to your view. Because the moment we get a settlement, its going to be like where is the taper . We feel like we havent been rewarded with the stock market at higher levels. I feel like nothing good is happening yet were bearly off t barely off the highs at all so that wouldnt take much. Youre seeing they do have a particular soft goods, an apparel line. If you contrast that with bed, bath and beyond last night, youll see there are certain parts of the Department Store thats going well, certain parts that are weaker. Ill bet you the overinventory had to do with the apparel. Are we any better at Government Shutdowns and debt ceilings . What finally happens or does anyone know . Weve got a good usa today piece about how much it saves off the gdp. We know 95 96 was a great example of shutdown, did hurt the economy. We know 2011 hurt the economy. All i can say is that we are not at a level where were losing a lot of jobs. Weve got jobless claims going well. I think people will say, listen, theres a lot of momentum with our international companies, dont fret over those, but fret over the domestics and come back to retail. Retail to me is a dangerous place to be if youre going into this. All right, jim. Well see you in a few minutes. Im going to grab a look at these lexei. Is that plural for lexus . I dont know. A news release from jcpenney saying its pleased with its turn around status and it is starting to achieve traction. Coming up, much more from our guest host, well give him the last word. Ill be outside in a second. My coanchors are out there. Well be right back. Confident r. Those dreams, theres just no way were going to let them die. Like they helped millions of others. By listening. Planning. Working one on one. Thats what Ameriprise Financial does. Thats what they can do with you. Thats how ameriprise puts more within reach. I love having a free checked bag with my united mileageplus explorer card. Ive saved 75 in checked bag fees. [ delavane ] priority boarding is really important to us. You can just get on the plane and relax. [ julian ] having a card that doesnt charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u. S. When i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. We are back with our guest host, jim, we have some lexei is that the plural . And preus could be prei. The lexus that i think of that is the luxury lexus, thats the ls, thats 70 to 100. This is not. This is a lexus that is meant to compete with the three series beamer or the mercedes. Exactly. In fact, youre number three in luxury. If you look at the domination of three series in that segment, this car now competes head to head. If you talk to a lot of journalists, many would believe this car outperforms the three series. Where do you come out . Its very impressive. I think it holds its own with it. It comes down to final test. Its not like you look at one and say its head and shoulders above the rest. All these different cars have different price point. Whats the highest margin car for you . Obviously the luxury cars. Does anybody order a standard transmission anymore with the beamer . Part of it is you can get that exhilaration of shifting with paddle shifters. I dont know how to work those things. Very simple. Very simple. No clutch. Acceleration is actually quicker on a paddle shift. If you learn how to do it, thats true. But sometimes i think the paddle shifter when you dont feel like using it, the transmission seems like it doesnt shift when i want it to. Have you noticed that on no. It feels like the rpms are going im going shift, shift. Other times im trying to get it to the rpms. There are different modes usually, even in the automatic transmission. Theres an economy mode and a sport mode. If you have it in sport mode, the rpms will go much higher when shifts. Is there a bigger engine in there . This is the 3. 5 liter. Theres also a 2. 5. Any chance you catch bmw or mercedes this year or do you look at that time and say next year . I dont think this year. But quite frankly, being number one, especially from the buyer perspective isnt important. Whats important is we take care of customers one at a time when they come to the stores. You said you were number one pretsunami. The tsunami was the big impact. Because you werent manufacturing for months. Yes. If you look at the lexus and you look at the rav4, this is the more styling direction, the more emotional toyota and lexus we havent had in the past. In the past weve always been phone for quality, reliability, but now the exterior is more exciting. This is a result you see of toyota taking the helm. And hes giving you a paddle shifting lesson after. All right, all right. Make sure you join us tomorrow. Right now its time for squawk on the street. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber. Watching for reaction to revised q2 gdp. Jobless claims a little bit